How to Start an LLC in Washington D.C. (2026 Guide)
Washington D.C. charges just $99 to form your LLC — genuinely affordable. But most default LLCs here owe a tax almost no other jurisdiction in this series has: the Unincorporated Business Franchise Tax, an 8.25% tax that catches freelancers and small business owners off guard more than anything else in D.C.'s process.
To start a D.C. LLC, file Articles of Organization with the Department of Licensing and Consumer Protection (DLCP) for $99 — online through CorpOnline, by mail, or in person. Every LLC then files a Biennial Report ($300) — not annual, but every two years — due April 1 of the year after formation, then every two years after. Most default LLCs also owe the Unincorporated Business Franchise Tax (UBT): 8.25% of net income, for any LLC with D.C.-sourced gross receipts over $12,000. LLCs where more than 80% of income comes from personal services and capital isn't a major income factor are generally exempt.
- State filing fee
- $99
- Filed with
- DLCP (formerly DCRA)
- Biennial Report
- $300 · every 2 years, due April 1
- Unincorporated Business Franchise Tax
- 8.25% of net income, if >$12,000 gross
- Personal-services exemption from UBT
- Yes — if >80% personal services
- Late report penalty
- $100 — grace period to Sept 1
What to Know Before You Form in D.C.
D.C.'s formation cost is genuinely low, but its ongoing tax picture is more distinctive than most states in this series. What's worth understanding clearly before you commit:
- A $99 formation fee — one of the more affordable filing fees anywhere in this series.
- A Biennial Report, not an annual one — $300 every two years, rather than a smaller fee every single year.
- A real entity-level tax most default LLCs owe — the Unincorporated Business Franchise Tax, covered in depth below.
- A system transition underway — DLCP is launching a new platform called BOSS in August 2026, replacing the current CorpOnline system; expect possible temporary service interruptions around that time.
D.C.'s Unincorporated Business Franchise Tax genuinely surprises new LLC owners more than any other single detail in this guide. Most default LLCs — those taxed as sole proprietorships or partnerships — with D.C.-sourced gross receipts over $12,000 owe this tax: 8.25% of net income, filed annually via Form D-30, completely separate from your Biennial Report. There is a real exemption for many solo consultants and freelancers — see Step 8 for the full breakdown before you assume this doesn't apply to you.
How to Start a D.C. LLC in 8 Steps
Your name must be distinguishable from every D.C. entity and contain "LLC" or "Limited Liability Company." Search free through the DLCP.
Every D.C. LLC must continuously maintain a registered agent — a D.C. resident or authorized entity with a physical in-district street address.
File the Articles of Organization
$99, filed with the DLCP — online through CorpOnline, by mail, or in person.
Not required by D.C., but it overrides default rules and satisfies your bank.
Get Your Free EIN from the IRS
Your federal tax ID for banking, hiring, and D.C. Office of Tax and Revenue registration. Always free at IRS.gov.
File Your Biennial Report AND Check the UBT
$300 to the DLCP every two years, plus a possible Unincorporated Business Franchise Tax to the Office of Tax and Revenue.
Get Business Licenses & Permits
D.C. requires a Basic Business License for most businesses — genuinely different from many states with no general license.
The Unincorporated Business Franchise Tax, a graduated individual income tax up to 10.75%, and a sales tax rate that's changing mid-2026.
What a D.C. LLC Really Costs (2026)
| Cost Item | Amount | When |
|---|---|---|
| Articles of Organization (required) | $99 | One-time, at formation |
| Biennial Report (required) | $300 | Every 2 years, due April 1 |
| Unincorporated Business Franchise Tax (if applicable) | 8.25% of net income, $250–$1,000 min. | Annual, via Form D-30 |
| Registered agent service (optional) | $100–$150/yr | Annual, if hired |
| Name reservation (optional) | $50 · valid 120 days | If reserving before filing |
| EIN from the IRS | $0 — always free | At IRS.gov |
Bottom line: $99 to form and $300 every two years to maintain — genuinely affordable for a founder who qualifies for the UBT's personal-services exemption. Multi-member LLCs and capital-intensive businesses should budget the UBT as a real, recurring cost. Model your exact setup below.
D.C. LLC Cost Calculator
D.C. LLC Cost Calculator
First-year + 5-year totals · verified July 2026
Excludes individual income tax and sales tax. The Biennial Report is $300 every 2 years, not annual — modeled accordingly across the 5-year total.
The Unincorporated Business Franchise Tax
This is worth its own section because it's the single most consequential tax detail in this entire guide: LLCs taxed as sole proprietorships or partnerships (the default for most LLCs) with D.C.-sourced gross receipts over $12,000 owe the Unincorporated Business Franchise Tax — 8.25% of net income, after a 30% salary allowance and a $5,000 exemption. A minimum tax applies even at zero or negative net income: $250 if gross receipts are $1 million or less, $1,000 above that. Exemption: LLCs where more than 80% of gross income comes from personal services rendered by the members, and capital isn't a material income-producing factor, are generally exempt. See Step 8 for the complete breakdown.
D.C. LLC Taxes at a Glance
Pass-through profits that aren't captured by the UBT flow to your personal return, taxed at D.C.'s graduated individual income tax — seven brackets from 4% to 10.75%, among the higher top rates in the country. Add federal self-employment tax of 15.3%. Sellers collect D.C.'s general sales tax, currently 6% but rising to 7% on October 1, 2026 under recent legislation — with steeper rates on restaurant meals (10.25%), hotels (14.95%), and parking (18%). Details in Step 8.
Ahmad Adil's Take: D.C. genuinely deserves a more careful read-through than most states in this series, because the $99 formation fee and $300 biennial report make it look simpler than it actually is. If you're a solo consultant whose income is genuinely personal-services-based, you're likely exempt from the UBT and D.C. becomes a very reasonable place to form. If you're running a business with real capital investment, inventory, or multiple members splitting profit from something other than direct personal services, budget the 8.25% UBT as a real cost from day one — this is the detail that catches more D.C. founders off guard than anything else in the entire formation process.
- ✓Forms your DC LLC for $39 + the $99 filing fee
- ✓Files online with the DLCP
- ✓Free DC registered agent the first year
- ✓No upsells · No data selling · Privacy by Default
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Washington D.C. LLC — FAQ
Ahmad Adil is the founder and CEO of LLC School. The figures here — the $99 Articles of Organization, the $300 Biennial Report due every two years, and DC’s Unincorporated Business Franchise Tax — reflect current DLCP and DC Office of Tax and Revenue guidance. This is educational content, not legal or tax advice.
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